Author Affiliations: Strategy Area, The Fuqua School of Business, Duke University, and Department of Community and Family Medicine, Duke School of Medicine, Durham, North Carolina; and Department of Health Policy and Management, Gillings School of Global Public Health, University of North Carolina, Chapel Hill.
Measuring variation in spending and outcomes is a critical component of reforming physician and hospital payment policy. Analysis of area and hospital variations has a storied history1 and is increasingly common in media reports.2 If higher spending does not lead to better outcomes, health care could be delivered far more cost-effectively. But if approaches to measuring costs and outcomes are flawed, reductions in spending might yield worse outcomes.
Huesch MD. Payment Policy Based on Measurement of Health Care Spending and Outcomes. JAMA. 2010;303(23):2405-2406. doi:10.1001/jama.2010.817